[TODAY] Coinbit exchange not as generous as you think
[TODAY] Samsung Asset Management has been sued by its investors for allegedly changing the composition of a fund, without notification, that caused them big losses. A lawsuit is not the most amicable method of finding an agreement between two parties, but the fact that the plaintiffs have standing is proof that exchange-trade funds (ETFs) — at the center of the dispute — are established financial products under Korean law. The same doesn’t go for cryptocurrencies. After losing a legal battle against the United States Securities and Exchange Commission, Telegram decided to halt the Telegram Open Network (TON), its blockchain project. It’s now likely that TON investors will embark on a lawsuit of their own against Telegram to have their money returned. But the same won’t be possible for Korean investors, as they purchased Telegram tokens indirectly, through so-called “group purchases.” This refers to coins first sold to venture capitals or several large capitalists, then resold to personal investors that form groups among themselves via messenger apps. At the moment, there is a lack of legal ground in Korea for these minor investors to claim their money. As for Coinbit, the exchange is giving out its “Community C” coins to users via airdrop as a two-year anniversary event. This coin is listed at the Coinbit exchange and since the event, prices have soared. But even if the value of the coins plummets, it would be impossible to hold Coinbit liable, as crypto exchanges are not an eligible financial institutes and therefore are not under the surveillance of the Financial Supervisory Service. And it’s hard to pursue a case alleging “fraud,” because each investment decision is at the end made by the individual. One billion coins were issued by a company with 20 million won in assets. After the company uploaded a notice that only 30 million of the total one billion units had been distributed, the price of Community C coins soared up to 1,785 won. This means 50 billion won worth of these coins are circulating in the market. Last year, Coinbit’s operator AXIA received its first external audit after surpassing the sales milestone that made it obligatory. The results came back as a “disclaimer,” meaning the company did not cooperate in providing data for the auditors. According to Coinbit’s financial statement, the company’s assets total 2.1 billion won. And yet, by issuing a single coin, the company has now gained 50 billion won worth of assets, solely considering the volume of Community C coins that are now distributed in the market. Investment decisions depend on individuals, but as someone that hopes for the crypto industry’s growth, it seems there needs to be some caution here.